NU Online News Service, June 26, 11:50 a.m. – Japan’s Daido Life Insurance Co., Nishi-ku Osaka, and Taiyo Mutual Life Insurance Co., Tokyo, today won the right to take over failed Tokyo Mutual Life Insurance Co., enabling it to resume business in October, according to a published report.
The Japanese duo beat out American International Group Inc., New York, and GE Edison Life Insurance Co., a unit of GE Capital Corp., Stamford, Conn., which had seen an opportunity to gain a foothold in the world’s second-biggest market, the report says.
Tokyo Mutual, formerly Japan’s 16th-largest life insurer, joined a succession of bankruptcies when it collapsed last March with liabilities of 980.2 billion yen ($7.91 billion) as of the end of September, according to the report.
Daido Life and Taiyo Mutual, second-tier insurers scheduled to integrate their operations in 2003, will slash returns promised to policyholders before 1998 to 2.6% from an average of around 4.7%, according to the report.
Tokyo Mutual’s negative net worth was 32.5 billion yen at the end of March, according to the report.
It was the seventh Japanese life insurer to fail in the postwar period, according to the report. Buying up failed life insurers is seen as a way to gain a foothold in Japan’s massive life insurance market at a bargain price, the report says.